Can someone break this down in simple terms? From what I can tell, they were selling lowers/receivers made of polymer, and they were/were not considered a firearm and were/were not serial numbered?
EP Armory was manufacturing polymer lower receivers and selling them in a condition the industry calls "80% finished" (or just "80%"). It means the receiver is not finished, is not ready to have a parts kit installed, does not function, will require machining by the buyer to finish it, and has not had enough work done for the ATF to consider it a "firearm".
As far as the ATF and (most) other government entities are concerned - outside of this incident, any way - it is nothing but a chunk of plastic (or aluminum, in the case of aluminum 80% lowers).
Since the lowers are not "firearms", they do not have to be marked like firearms. They don't need serial numbers. They don't need model numbers. They don't even need the manufacturer's information. In the case of EP Armory, they used no markings at all - the receivers are completely blank, with no identifying markings.
Not being "firearms", the receivers can also be shipped to anyone, without the involvement of an FFL. Most companies selling 80% lowers still require a signature from an adult 21+ years of age, but some don't care. Although that isn't directly related to the legal reasons cited for raiding EP Armory and Ares Armor, that fact is one of the most irritating things about these lowers, for the anti-gun crowd - prohibited persons and minors can buy one of these lowers to build an "untraceable, unregistered, 'Ghost Gun'" AR.
....But that's always been possible. Be it a felon or teenager, if they can mill an 80% lower, they can mill a
raw forging as well (completely untouched chunk of aluminum in the shape of a lower receiver, that hasn't had any machine work done to it - a paper weight, in the eyes of the law).
Where the EP Armory lowers stand out, is their polymer construction. In theory, the polymer is much easier to work with, and much quicker to remove than aluminum. So, the "80%" polymer lower becomes a finished lower with much less effort, and in much less time.
In reality, the dissimilar polymers used in the EP lowers actually makes them much harder to work with, than aluminum. Drilling and milling around that fire control group pocket "block" is like sticking your hand in the mouth of an alligator. You don't know when, but it WILL bite.
This is not legal advice. YMMV and caveat emptor.]